An Ohio appellate court has considered whether sellers were required to alert buyer about the possibility of a sewer assessment on sellers’ property.

Nathan and Shirley Teague ("Sellers") sold their residence to Arthur and Vicki Maser ("Buyers"). The transaction closed on May 31, 2002. The purchase contract contained the following language: "SELLER warrants that the SELLER has not received written notice of pending assessments for the property".

The Sellers had sought improvements in their sewer system, signing petitions seeking improvements in 1995 and 1996. The Sellers also attended meetings related to sewer improvements. On August 16, 2002, the Stark County Metropolitan Sewer District ("District") issued a notice of a meeting where the District would consider acting on a resolution for sewer and water projects. Ohio law requires that any sewer district seeking to make a public improvement to be paid through a special assessment must pass a resolution to act on the proposed project and following the resolution's approval, the public has a period to voice any objections to the proposed project.

The Buyers filed a lawsuit against their own representatives, the Sellers, and the Sellers' real estate licensees, alleging fraud and breach of contract for failing to disclose the "upcoming sewer and water improvement assessments". The trial court entered judgment in favor of all the defendants, and the Buyers appealed.

The Court of Appeals of Ohio, Fifth District, affirmed the rulings of the trial court. The court considered whether the Sellers and the real estate professionals had a duty to notify the Buyers of the possible sewer assessment. The Buyers argued that the doctrine of caveat emptor (“buyer beware”) should not apply here because they could not have discovered the potential future assessment through an inspection of the property.

The court rejected this argument, as the court stated that the Buyers still needed to establish that the Sellers had a duty to inform the Buyers about the assessment on the property. No statute or other authority imposed a duty upon the Sellers to disclose this information. Since the District's meeting to decide whether to act on the sewer improvements didn’t occur until two months after this transaction closed, the court ruled that the Sellers and the real estate professionals had no duty to disclose the potential for a new sewer assessment. Thus, the court affirmed the trial court rulings.

Maser v. Teague, No. 2004CA00039, 2004 WL 2955224 (Ohio Ct. App. Dec. 20, 2004).
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